Crypto is the future: BlackRock CEO

The world’s second largest crypto exchange has gone bankrupt, Bitcoin has fallen above $40,000 and the DeFi market is seeing a bottom in user deposits.

Are Crypto and DeFi Dead? Laurence (“Larry”) Fink, CEO of the world’s largest asset manager BlackRock, remains optimistic. In his opinion, crypto and DeFi will start the next revolution in the financial markets.

Laurence Fink spoke at the New York Times Summit 2022 about the current situation and the future of the financial markets. The CEO of investment giant BlackRock believes that tokenized cryptoassets and DeFi will completely replace traditional financial assets and third parties like banks. Fink explained why the crypto exchange FTX failed.

Laurence Fink on crypto exchange FTX

BlackRock invested not only in the crypto exchange Coinbase, but also in the now insolvent crypto exchange FTX. The investment giant lost a total of $24 million in the process – quite a small amount for BlackRock, which currently manages assets worth around $8 trillion (!).

In particular, the CEO admitted that the company, like other investors, may have been misled. However, Larry Fink only wanted to give a little information about the FTX crash because he wanted to wait until the topic was settled.

But according to Larry Fink, FTT, FTX’s token and the company’s centralized structure were responsible for the crash, not the crypto itself. According to Fink, crypto is a system-wide, open and distributed register (“ledger”) and FTX is therefore exactly the opposite of what crypto actually means. In addition, crypto remains a technology with great potential for the investor. This will transform the financial and investment market, just like ETFs currently:

“I really believe that this technology will be extremely important (…). The next generation (after ETFs) for the markets, the next generation of securities will be tokenized securities.”

BlackRock CEO: Blockchain and DeFi will revolutionize the financial market

Theoretically, any object such as gold, securities or real estate can be “tokenized” using blockchain technology. This process creates a digital representation (the token) on the blockchain, which can even be traded without a third-party custodian (such as banks), i.e. decentralized. This is precisely the goal of the DeFi movement, which wants to bring power back from the banks and other central entities into the hands of the people. According to Fink’s forecast, the DeFi movement will probably reach its goal.

The benefits of decentralized blockchain technology, cited by Fink, include “dramatically lower transaction costs” and instant processing of contracts. When asked if BlackRock should be concerned about this blockchain technology, Fink explained:

“We are not a bank that keeps deposits.”

So the BlackRock CEO seems convinced that DeFi and crypto could eventually make banks obsolete. Furthermore, according to Fink, decentralized voting mechanisms will make the CEO’s day-to-day work easier:

“For my own part, I will not participate in share measurements in the future. The beneficial owners will do all the voting.”

Still, the BlackRock boss remains bearish, at least in the short term. In his opinion, most cryptocurrencies will not survive the current bear market.

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